KUWAIT: Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al-Marzouq said that, by the grace of Allah, KFH has reported net profit of KD 357.7 million attributable to the shareholders of the bank for the year ended 2022; an increase of 47.0 percent compared to 2021. Ahli United Bank – Bahrain contributed to the profit with an amount of KD 62.5 million or 17.5 percent which represents the results of AUB for the period from the date of the acquisition on October 2, 2022, until end of FY22, following the successful completion of the acquisition of 100 percent of Bahrain’s Ahli United Bank by KFH, and the listing and trading of its shares on Bahrain Bourse on October 6, 2022.
Al-Marzouq added that the fourth quarter of 2022 witnessed a record growth of 101.7 percent in profits attributable to shareholders of KFH compared to the same period of 2021. This came as a result of combining profits of AUB-Bahrain after the successful 100 percent acquisition of its shares, and the earnings per share for Q4 of 2022 increased from 7.74 fils to 10.70 fils, an increase of 38.2 percent compared to the same period last year.
Earnings per share for the year ended 2022 reached 33.58 fils compared to 25.99fils for last year, an increase of 29.2 percent. Net financing income for the year ended 2022 reached KD 800.5 million, an increase of 36.7 percent compared to last year. Total operating income for the year ended 2022 reached KD 1,072 million, an increase of 32.2 percent compared to 2021.
Net operating income for the year ended 2022 reached KD 723.3 million, an increase of 43.8 percent compared to 2021. Total assets increased to reach KD 37.0 billion, an increase of KD 15.2 billion or 69.7 percent compared to last year. Financing receivables increased to reach KD 18.8 billion, an increase of KD 7.5 billion or 65.9 percent compared to 2021.
Depositors; accounts reached KD 22.5 billion, an increase of KD 6.6 billion or 41.7 percent compared to 2021. Shareholders’ equity reached KD 5.4 billion, an increase of 177.4 percent compared to 2021. In addition, the capital adequacy ratio reached 17.66 percent which is above the minimum requirement. This percentage confirms the solid financial position of KFH. The Board of Directors has proposed 15 percent cash dividends to shareholders and 10 percent bonus shares subject to approval of the General Assembly and the concerned authorities.
Strong operational performance
Al-Marzouq added that KFH successfully maintained its sustainable approach in achieving growth and profits in all main financial indicators. He explained that KFH achieved positive ratios in terms of profitability, ROAA, ROAE, improving asset quality ratios as well as the coverage ratio of provisions for non-performing debt. Also, KFH maintained good ratios in terms of cost to income which confirms the flexible business model of KFH and its successful plans and strategy.
Al-Marzouq explained that KFH enjoys strong liquidity ratios and solid capital base that support its business growth, in addition to strong operational performance resulting in growth in operating income, profits, financing portfolio, and customer deposits.
Al-Marzouq said that KFH successfully completed the acquisition of Bahrain’s AUB in 2022, which represents a promising strategic project and historic and pivotal stage in KFH’s journey. He added that the acquisition turns KFH into the largest bank in Kuwait, and the second largest Islamic bank in the world, and increases its market capitalization now to more than KD 11 billion.
Al-Marzouq pointed out that KFH maintains its distinction in providing financial solutions according to the highest quality standards, while moving forward in adopting the latest financial technology (FinTech) innovations, employing artificial intelligence in banking transactions and increasing investment in technology to solidify KFH’s leading position and bring customer experience to new levels.
He added that KFH is the first bank in Kuwait to apply artificial intelligence technology in its operations, and the first bank to provide personal financing request service using a digital signature through KFHonline app. Also, KFH was among the first institutions to join cross-border payment system (AFAQ) and among the first banks to launch Apply Pay service, along with many different digital initiatives.
Al-Marzouq confirmed that KFH’s efforts continue to provide corporate banking services, support SMEs and entrepreneurship and youth because they are elements of sustainability and are among the most prominent pillars of the Bank’s strategy in the foreseeable future, in addition to being within the framework of national and societal responsibility.
Al-Marzouq expressed his pride that KFH has a track record of social initiatives and various contributions, most notably: signing MoU with Kuwait Municipality for the design and reconstruction of damaged areas of Al-Mubarakiya market at an estimated cost of around KD 8 million. In collaboration with the Ministry of Justice, KFH has executed an initiative to cover the payments on behalf of people with defaulted debts. The amount paid exceeded KD 20 million, benefitting nearly 10,000 debtors. KFH also supported Kuwait Red Crescent Society in its relief and social initiatives inside and outside Kuwait. The total value of contributions during 2022 reached about KD 4.5 million.
KFH Acting Group CEO, Abdulwahab Iesa Al-Rushood said that growth ratios in the main financial indicators confirm KFH’s strong performance and its financial strength and reflect balanced performance and sustainable growth in all main balance sheet items.
He added that KFH continues its efforts to maximize profitability and ROE, improve asset quality, enhance harmony within the Group banks and units in Turkey, Bahrain, Malaysia, Germany and Saudi Arabia as well as enter new markets such as UK and Egypt in light of the successful completion of the acquisition of 100% of the shares of Bahrain’s AUB by KFH, which contributes to expanding the competitive capabilities and maximizing the returns to shareholders and customers.
Al-Rushood confirmed that KFH achieved remarkable progress in its digital transformation strategy and has been classified a market leader in digital solutions by Euromoney. He pointed out that annual rate of growth in the customers’ use of digital financial solutions provided by KFH through KFHonline exceeds 32 percent.
This confirms the efficiency and quality of KFH services, both as provided through mobile or through other channels. Al-Rushood indicated that KFHonline provides more than 150 services, while XTMs and KFHGo branches provide about 50 other services, which means that KFH customers have the opportunity to use around 200 e-services via mobile and various self-service channels. Al-Rushood confirmed that KFH leads the competition and achieves growth in terms of customer base and market share in retail banking.
Al-Rushood said that during the year 2022, KFH strengthened its focus on continuing to develop talents and invest in knowledge, pointing to the launch of KFH Digital Academy, which aims to build the digital capabilities of employees according to global standards. He also indicated that the idea of the academy is consistent with KFH’s digital transformation plan and builds qualified human capabilities with the aim of serving KFH’s strategic goals. He highlighted the success KFH achieves in attracting and developing national talents, adding that KFH has the largest number of Kuwaiti employees at the level of Kuwaiti banks and all private sector institutions, while the percentage of attracting Kuwaitis for new appointments reached about 100 percxent in recent years.
$13 billion of sukuk
Al-Rushood explained that the Group Treasury has relentlessly expanded its investment and trading activities in Primary and Secondary Capital Markets and executed transactions worth more than $13 billion during 2022. Also, KFH Group Treasury maintained its leadership position in IILM Market Making and won the top rank primary dealer for the 6th time and the 2nd consecutive year for secondary dealer from amongst several international and regional banks ranked by IILM.
Al-Rushood confirmed that KFH made great strides in its sustainability strategy, adding that KFH is the first Bank in Kuwait to receive the Global Sustainability Assessment System GSAS – Gold Level Certificate. He added that KFH takes into account environmental, social and governance standards (ESG) and supports sustainability efforts by actively participating in green Sukuk issuance and implementing sustainable initiatives under Keep it Green campaign.
23 prestigious awards
Al-Rushood said that KFH won 23 prestigious awards from global providers, such as the “World’s Best Islamic Financial Institution 2022” award from Global Finance Group. He pointed out that the awards are in appreciation of KFH’s outstanding achievements in various fields, innovative products and services, digital solutions, leading position, reliability, solid financial position, and the strength of its brand.
In conclusion, Al-Rushood expressed his appreciation for the support of the Board of Directors and thanked the regulatory authorities, praising the efforts of employees and all partners and stakeholders. He stressed that the trust of shareholders and customers is the first award of KFH.